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Welfare Reform, Saving, and Vehicle Ownership: Do Asset Limits and Vehicle Exemptions Matter?

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  • James X. Sullivan

    () (University of Notre Dame)

Abstract

This paper examines whether AFDC/TANF asset tests affect the asset holdings of low-educated single mothers, exploiting variation in asset limits and exemptions across states and over time. There are important reasons to examine vehicle assets in this context. For example, vehicles make up a very significant share of total wealth for poor families, and the variation in vehicle exemptions over time and across states far exceeds the variation in asset limits. Consistent with other recent research, I find little evidence that asset limits have an effect on the amount of liquid assets that single mothers hold. However, I find evidence that vehicle exemptions do have an important effect on vehicle assets. The findings suggest that moving from a $1500 vehicle exemption to a full vehicle exemption increases the probability of owning a car by 20 percentage points for low-educated single mothers relative to a comparison group. Also, the results indicate that single mothers are not substituting vehicle equity for liquid assets in response to more relaxed restrictions on vehicles.

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  • James X. Sullivan, 2005. "Welfare Reform, Saving, and Vehicle Ownership: Do Asset Limits and Vehicle Exemptions Matter?," Upjohn Working Papers and Journal Articles 05-117, W.E. Upjohn Institute for Employment Research.
  • Handle: RePEc:upj:weupjo:05-117
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    Cited by:

    1. Charles Baum, 2012. "The effects of food stamp receipt on weight gained by expectant mothers," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(4), pages 1307-1340, October.
    2. James X. Sullivan & Lesley Turner & Sheldon Danziger, 2008. "The relationship between income and material hardship," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 27(1), pages 63-81.
    3. Andrews, Margaret S. & Bhatta, Rhea & Ver Ploeg, Michele, 2012. "Did the American Recovery and Reinvestment Act Increase in SNAP Benefits Reduce the Impact of Food Deserts?," 2012 AAEA/EAAE Food Environment Symposium 123520, Agricultural and Applied Economics Association.
    4. Leah Gjertson, 2016. "Emergency Saving and Household Hardship," Journal of Family and Economic Issues, Springer, vol. 37(1), pages 1-17, March.
    5. Bruce D. Meyer & James X. Sullivan, 2006. "Consumption, Income, and Material Well-Being After Welfare Reform," NBER Working Papers 11976, National Bureau of Economic Research, Inc.
    6. Blumenberg, Evelyn, 2008. "Immigrants and transport barriers to employment: The case of Southeast Asian welfare recipients in California," Transport Policy, Elsevier, vol. 15(1), pages 33-42, January.
    7. Charles L. Baum II, 2010. "The Effects of Food Stamps on Weight Gained by Expectant Mothers," Working Papers 201002, Middle Tennessee State University, Department of Economics and Finance.
    8. repec:wly:iecrev:v:58:y:2017:i:4:p:1117-1154 is not listed on IDEAS
    9. Svetlana Pashchenko & Ponpoje Porapakkarm, 2017. "Work Incentives Of Medicaid Beneficiaries And The Role Of Asset Testing," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 58(4), pages 1117-1154, November.
    10. Dutko, Paula & Ver Ploeg, Michele & Farrigan, Tracey, 2012. "Characteristics and Influential Factors of Food Deserts," Economic Research Report 262229, United States Department of Agriculture, Economic Research Service.
    11. Cynthia Sanders & Shirley Porterfield, 2010. "The Ownership Society and Women: Exploring Female Householders’ Ability to Accumulate Assets," Journal of Family and Economic Issues, Springer, vol. 31(1), pages 90-106, March.
    12. Ver Ploeg, Michele & Breneman, Vince & Dutko, Paula & Williams, Ryan & Snyder, Samantha & Dicken, Chris & Kaufman, Phillip, 2012. "Access to Affordable and Nutritious Food: Updated Estimates of Distance to Supermarkets Using 2010 Data," Economic Research Report 262227, United States Department of Agriculture, Economic Research Service.
    13. Ver Ploeg, Michele & Mancino, Lisa & Todd, Jessica E. & Clay, Dawn Marie & Scharadin, Benjamin, 2015. "Where Do Americans Usually Shop for Food and How Do They Travel To Get There? Initial Findings from the National Household Food Acquisition and Purchase Survey," Economic Information Bulletin 262116, United States Department of Agriculture, Economic Research Service.
    14. Baum, Charles L., 2009. "The effects of vehicle ownership on employment," Journal of Urban Economics, Elsevier, vol. 66(3), pages 151-163, November.
    15. Nathan Berg & Todd Gabel, 2013. "Effects of New Welfare Reform Strategies on Welfare Participation: Microdata Estimates from Canada," Working Papers 1304, University of Otago, Department of Economics, revised Feb 2013.

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    Keywords

    Sullivan; TANF; eligibility; vehicle; asset limits;

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